Oct 25, 2021 Public Utilities Board on 2021-10-25 9:00 AM

Okay, it is 901 and we do have a quorum so we're called to order the public utilities board meeting for October 25th for the city of Denton. The first item is public comment. Is there anybody present that would like to speak to the board? Is there anybody on the phone? No, ma'am. There are no callers. All right. Then we'll go into our regular meeting. The first items are the consent agenda, items A through I. Does a board member wish to pull any of the items? Oh, yes, go ahead, Ben. Item H. Any other items? All right. Before we go on to item H, do we have a motion to approve items A through, sorry, A, B, C, D, E, F, G, and I? Move approval of those items. Second. All in favor say I. I. I. Carries. Item H, then. Okay, so talking about odor control for the landfill. As I recall, we had a similar topic recently, so I was wondering, what's the difference? Is this, in fact, the same thing? No, this is a different stuff. Okay. So how is it different, then? How is it different? Okay. The item we talked about, the Aeropure, a couple of months ago, it is direct application. It's loaded into our water truck. We spray it onto the roads. We spray it into the working face. This is actually a volatilization system. So it comes in a 250-gallon carboy, big plastic cube, hooked up to a very high, getting very technical here, but a very high-pressure air pump, and it's atomized into the air and basically makes a curtain along the southern wall, just like Febreze or a material like that, captures the odors, destroys it. So it's just another, basically, block in the wall to try to eliminate or mitigate any odors that could potentially result from our operations at the landfill. So what, I guess, give me an idea of how necessary that is. For the direct application, how many of the odors does that kill and how many escape, and then what will this help prevent? It's hard to say this percentage, this percentage, this percentage, but again, it's belts and suspenders is what it is. So ultimately, we've got a very, very close neighborhood right next door, and we want to try to make sure that we're as amenable to those neighbors as we possibly can. And additionally, we're required under our permit to enact whatever mitigation techniques are required to control odors, and this is one of the things that we've committed to do. Okay. All right. Do we have a motion to approve Item H? Oh, I'm sorry. Oh, go ahead. Mr. Taylor. Forgive me, I'm not very familiar with the recent items on odor control. Yes. Will this have any benefit for odors from the wastewater treatment plant, which is right next door? You know, that's a very good question, and something we consider always, you know, it's a few thousand feet further to the east, or excuse me, further to the north, but any odors that are within this pocket, you know, it has the potential of controlling. I'm not going to say it's fully 100%, but I would imagine that it would control any odors or capture or destroy any odors that would be coming from it, from this area. And this is, you said it's only along, basically the south? Yeah, southern and southeast portion, correct. And that's basically right next to the existing neighborhood, just to the south? The existing? The neighborhood. Correct. Correct. And so, are there any odor control facilities, either wastewater or landfill, on the north side? No, there's not, because we really have, we're our own neighbor at that point, we own basically all the property north for quite a bit, so as we move north, then we would anticipate potentially putting those type of systems in place, but right now it's not required. Thank you. Other questions? All right. Do we have a motion to approve Item H? Mr. Beck moved. Carver seconded. All in favor, say aye. Aye. Carries. Thank you. Thank you. The next item is consider approval of the October 11th minutes. Do we have any changes or corrections? Yes, Mr. Beck. On the minute, so when the information, when Kim sent out the information, I didn't see a link to look at those. I was just curious, not that I have anything, I just, was there a place where you could click on? Yes, there is. There... What did I miss? Yeah. This new technology is... Looking for a minute? Yeah. You should be able to click on the... Never mind, never mind. This is the first time I've operated. Okay. All right. At the risk of appearing completely naive with this stuff. Thank you. All right. Do we have a motion then to approve the minutes? So moved. Mr. Denton. And Barbara seconded. All in favor, say aye. Aye. Opposed? Carries. Okay. Consider the adoption of an ordinance for the City of Denton authorizing the expenditure of funds for the payment of wholesale transmission charges in the total amount of $6,654,159.68. Good morning. I'm Nancy Ogden, Director of Finance. Here to present... Oops. It looks like I'm on the wrong side. Transmission cost of service expenses. So this is a routine expense every year for our electric fund. We bring these to you for really transparency. They are approved as part of a budget expense item, but we're seeking your expenditure approval today. So just really quickly, these charges reimburse other transmission service providers within ERCOT. So it's basically our share of their transmission assets. And you can see on the chart all of the transmission providers were paying this year a little over $6.6 million. And then just for informational purposes, these are all the payments from last fiscal year. So $6.2 million altogether. And again, we did bring these to PEB and council last year as well. So with that, I'll stand for any questions. We are paying them. So we also receive money from our transmission assets, but this is actually payments to other transmission providers. I'm sorry. So obviously what we're producing here isn't enough to generate what we need for the City of Denton? Is that why we're... I'm going to hand that over to Terry. Okay. Well, no, sir, I'll try to answer it. So these are assets that are owned and investments that are made by other operators in the ERCOT grid, right? It's a joint uniform grid that everybody uses. And so this is our share or our piece that we have to pay for the use of everybody's assets, just like they pay for our share of the assets as well. And so just for your information, currently, our share that we get back is about $54 million. So it's a pretty good trade-off from our standpoint, but yeah, that's what that is, and it's based on an annual, what's called a 4CP. So it's four particular days in the year where that's calculated, and then it's pro-ratted out based on everybody's approved rates. And as you may know, we're going through that process now to set our annual rate going forward with the PUCT. So... Okay. Thanks, Tony. Eventually, I'll catch up with all this. So thank you. Oh, thank you. My question is, you mentioned fiscal year, and I hate to be unknowledgeable, but what is the city's fiscal year? So our fiscal year runs from October 1st to September 30th. We just started a new fiscal year. Thank you. And Madam Chairman, I apologize for being late today. Thank you. So these are based on 4CP for basically the past four months, and this is a one-time annual payment based on previous year, or current calendar year, previous fiscal year. And I'm curious, the shares seem pretty much the same as last year, like kind of the ratios. Are these all of the transmission providers in ERCOT, or are these just the transmission providers from which we get a transmission benefit? It's the ones that we have transmission benefit, and again, those rates, the rates that they charge are set whenever they do a full rate filing. And just for your information, for Denton, the last rate filing that we had a full rate filing was in 2005. We're going through that process now. And that's pretty standard, I think, for municipally owned utilities and co-ops. Private IOUs actually do those a little bit more frequent than we do, just because of how their calculations are completed through the PHCT process. And then, is the rate per megawatt fixed based on that, and then the 4CP makes what the megawatts are vary, or is it? So the 4CP sets the volume at which that rate is calculated, correct? Okay. Thank you. Second. All in favor say aye. Aye. And opposed. Thank you. All right, so Madam Chair and members of the PUB, so we have a couple of reports set to you here. The first one is the DME or the Dent Energy Center dashboard for the month of August. That represents 11 months out of the year, and certainly if you have questions, we can go through those. And then, I think, you know, Member Ryabek had asked for this winter preparedness plan, and so Terry Nolte's here, and we've prepared that for you, and certainly if you have questions, we certainly can respond to this. I'll just mention, you know, that PHCT and ERCOT are going through some market redesign changes and some requirements that they have to be met. Obviously, you may have heard of some of those in the news here recently, and so we're working through that process as well, and I hope that here by, I think by December 1st, they'll kind of set what those requirements may be for us, and we'll have a better feel for where we need to be going. We certainly have some plans that we've already made preemptively to try to be prepared for this coming winter. So, I'll stop there. So, if you have any questions, if there's any questions on the dashboard or the memorandum that you received from Mr. Nolte. Thank you, Chair. I have a couple of questions, one on the DEC Energy dashboard. So, the dashboard has monthly revenue, but then all the costs are just year-to-date. It's very challenging because of February, because there's this overwhelming number at the beginning of the year. It's hard to tell kind of the monthly costs and so forth. I know that natural gas has basically doubled in cost in the last year. Is that, and we're still in August where our net selling or average selling sales price was $81 a megawatt. Has the gas price impacted the floor at which the DEC can operate? Good morning. Terry Nolte, Assistant General Manager in DME. So, the gas price does determine when the units are dispatched. We convert natural gas to electricity at a set rate, it's called the heat rate. So when the natural gas price goes up, that heat rate remains the same. The cost to produce then goes up as well. But the market reacts to that because all generators in the market are using natural gas and so the whole market price has gone up. So from a gross margin perspective for the DEC, which gross margin meaning revenues less variable operating costs, the gross margin is about the same. So the ERCOT market has in fact been doing a number of things after Yuri to try to make sure we don't have price excursions. And that's dampened it a little bit, but as you can see from that report, we're well ahead of budget on gross margin and net income for the DEC, primarily because of what happened in February. And then my next question is about the winterization report. Not directly to the winterization report but to new legislative requirements where instead of what DME needs to do to prepare the DEC, what customers of DME need to notify DME about critical loads. And I know that there's been talk that there might be so many critical loads identified that there won't be enough circuits that can be shed. And I know you don't have like that those filings are required by November 1st, so you don't quite have them all yet. Do you anticipate any effect on the distribution side or the city side, not the generation side of DME from the legislation? Sure. So the legislation is focused on natural gas critical infrastructure. And so that was to identify those compressor stations, those natural gas processing units that lost power during the winter storm and therefore could not pressurize the gas or process the gas, leading to the shortage of gas. So we have in fact, I've reached out to those facilities on our system that we know are part of that infrastructure. And they have in fact filed with us for that status as a critical load. To your question, though, when we look at our loads that we serve that are critical, that might be, you know, medical loads, hospitals, police stations, fire departments, things that are critical. As of last week, we have only had an increase of about 10 facilities from where we were at the time of the storm. So we are proactively reaching out to some facilities that we knew experienced problems during the storm. So the only thing that I will add to that, and we certainly saw this during winter storm URI, is that even though we had critical load facilities, the grid was in such a position that we actually had to start rolling even some of those kind of, what I would say, kind of tier three or tier four critical load facilities. And so we had places, you know, like a nursing home, a couple of terms, that we had to include in that rolling just because of where the grid stood at that time. And so yes, there's a designation as critical load, but when things get critical, right, then you have to look at potentially rolling those. And certainly if the grid had collapsed as there was fear, then all of that would have been out the window and even the critical load facilities would have been out of power. But it's a plan. It's a plan that we look at every year, and we have to file with the PUCT and to ERCOT. And so it's something that our staff has diligently worked on ever since winter storm URI. Morning. So I know you love reeducation questions, but where are we with our ECA right now? I mean, energy cost adjustment. I don't recall seeing one come through here recently unless I missed the meeting or something. So you still, does the ECA, energy cost adjustment still come through the PUB before it goes to city council? So we have not, Mr. Cheek, we have not adjusted the ECA in quite some time. It's been a matter of a couple of years, actually two and a half, three years. But yes, to the extent that we would make a recommendation on a change to the ECA, it would come to PUB first and then ultimately be approved by council. So we are doing a cost of service study now, and we anticipate bringing back the results of that cost of service study sometime after the first of the year, probably in the first quarter. And part of that finance is indicated we'll be looking at the ECA and base rate. Yeah, I do remember the last time we approved it, we were over collecting for a while, but it probably ended up being a good thing, it stayed at a steady rate, and then we had the whole winter storm thing hit, and of course that's a whole different adjustment with the winter storm. Okay, I wanted to make sure, because I know I hadn't seen it come through here in a while. That's it. There were two line items in the weatherization report, the extreme cold weather prep and procedures and cooling water system and frequent operations. Now, they're not included with this document, and I don't know if it's appropriate in this current session, but I would like at least a thumbnail sketch of what those are. Sure. If it's not appropriate at this time, another time will be fine. So Mr. Rybak, so those documents are restricted from public dissemination under NERC requirements. But basically, during the storm, what happened was when we lost natural gas, we lost the heat source that was heating the cooling water, and the cooling water then circulates out through the radiators and back into the engines. What we could not do at that point in time was we were not able to drain the liquid, the cooling fluid, from all the generating units rapidly enough to avoid freezing it in the pipe. And just like a pipe burst in your home, you know, when the water froze up, glycol and water froze up, it expanded, and we had some tube ends that blew out. So what we've done is we've effectively plumbed in a drain system that the operators can now go out, and if they lose natural gas pressure and natural gas supply during weather conditions that are below design, and the deck is designed to operate below freezing for some period, for extended periods of time, they can go out and through a series of valve positions drain all those engines very, very rapidly, and we can avoid that damage that occurred, that freeze-up that occurred. So that's effectively what we do. The two procedures are very detailed, and, you know, they deal with the specific valve positions, timing, there's logs that have to be entered in that type of thing. Gotcha. If the generators had been running at full capacity rather than the gas pressure problem, even at sub-freezing temperatures, there would have been enough heat in the radiator to keep going. As far as our engineering analysis, we do the heat transfer analysis, yes, we'd have been in fine shape. Okay. Yeah. Thank you. I have a question, Tony mentioned the tier three, tier four loads, critical loads, hospitals, that sort of thing. Now my presumption is they have their own emergency power, stand-alone emergency power for their critical operations. Is that generally correct, or are there some glaring deficiencies out there? Somewhat generally, what I would say is that, you know, what we found during winter storm yuri is that a lot of these generators that some of these facilities have, you know, the fuel type that they have, whether it was gasoline or even diesel, had problems, either it was freezing and gelling of those, and they just weren't operable. We had the same challenges in our own water utility as well, and so those are things that people are working on. The hospitals were actually in pretty good shape, I think they do pretty good testing of other generators, and we were in very close communication with both of the major hospitals here in the city. So the answer is yes and no, but, you know, I think certainly winter storm yuri has brought a whole different level of attention to some of those facilities, and they've made some improvements on their own, not required, just to be prepared in the event that something like that would happen again. Yeah, we do have, we have identified a few facilities that are long-term care facilities that really should have their own self-generation, did not during the storm, we're working with them to try to help them figure out how to meet that requirement. All right, guess not, new business action item. So Madam Chair, sorry, just, so the last item that we have on here was just a new business action item, and so again, obviously we had this request on the emergency preparedness, we've fulfilled that, we are currently working on getting an update to you on this legislative update, I think we've narrowed that down, I hope to get that out to you here in the next week or so, but then the other items are items that we're still kind of working on and have forgotten, but they're still on the list, and certainly if you have any questions on these or if there's anything else that we need to add to the list, certainly happy to address that now if you'd like. Doesn't look like there's any questions, all right, thank you Tony. Moving items, does any board member wish to have something added to a future agenda or have some comments to be made to the public? I see none, all right, your favorite time Mr. Cheek. Do we have a motion to adjourn? That's me. 925. Okay, we're adjourned.